MBA Programs: an Outdated Curriculum

In 2007, MBA graduates armed with their Black Scholes formulas, econometric theories, and mass marketing techniques entered a bustling job market with seemingly limitless career opportunities. They had no reason to look back; for decades MBA holders had held executive positions at some of the most successful Fortune 500 companies in the world: Richard Fuld (MBA from NYU) was the CEO of Lehmann Brothers, Kerry Killinger (MBA from the University of Iowa) led Washington Mutual, and G. Kennedy Thompson (MBA from Wake Forest) headed Wachovia’s operations.

The sub-prime mortgage crisis of 2007 took many by surprise and destroyed the investments of many. Not only did the crisis render obsolete the tools MBA programs taught to its students, it wiped out the value of inflated investments banks made, forcing many to bankruptcy. The lack of transparency and delineation of personal risk involved with making investments allowed the consequences of bank failures to spread globally. Because of the financial crisis, the public lost confidence in the value that MBA programs deliver. Furthermore, prominent financial institutions were no longer seen as beacons of opportunity; they were broken systems that needed reform to become relevant in the 21^st century.

The Aftermath of the Financial Crisis

The financial crisis had reeling effects on stock markets, financial institutions, and personal wealth. By 2009, the Dow Jones Industrial Average bottomed out at $6,000, less than half its 2007 value of $14,000. Successful businesses, including the aforementioned Lehmann Brothers, Washington Mutual, and Wachovia went bankrupt, resulting in thousands of lost jobs. Finally, the deflated housing bubble cost average homeowners substantial amounts of their life savings as home prices collapsed.

Global financial institutions, often headed by MBA graduates, took the brunt of the blame for causing the crisis. According to a paper entitled, “Job Outlook for the Class of 2010,” large organizations with over 4,000 employers who historically hired over a hundred MBA graduates every year instead hired fewer than 70. Furthermore in 2009, the average number of new-hires per company fell to 26 individuals, the lowest average of college hiring in several decades. With a waning demand for business school graduates, MBA programs around the world needed to reform their curriculums to cater to the post-crisis world of business.

Today MBA programs have little semblance to the one-dimensional curriculums taught prior to the financial crisis. Experienced professors and ambitious students steering away from the traditional business model of specialization have fueled the reemergence of the MBA. According to President of Philadelphia University Stephen Spinelli, “We used to think it was highly collaborative when marketing and finance were working together. Now we see that partnerships need to be much broader; three-dimensional collaboration needs to be taught.”

MBA Programs in Entrepreneurship

Entrepreneurship has emerged as one of the hottest topics for MBA programs in the midst of the financial crisis. With financial organizations and “too-big-to-fail” organizations blamed for their mismanagement of money and control over the global economy, business-savvy students are rediscovering the potential for small businesses to succeed and create jobs in this economy. According to the Financial Times, management of small and medium enterprises (SMEs) represents a wholly underrepresented area of study for business schools. Although SMEs may not offer MBA graduates flashy entry-level jobs that established companies do, startups are devoid of bureaucratic structures hindering exemplary employees from achievement

Wells Fargo acquired Wachovia after the bank’s ill-advised investments caused it to go bankrupt form the financial crisis. Since then, Wells Fargo has actively recognized the important role entrepreneurs play in today’s economy. Starting with a $150,000 investment in Wake Technical Community College, Wells Fargo will continue to invest in “the development and delivery of education, support, and resources for present and future small businesses and entrepreneurs in the Wake County area.” This partnership offers an entrepreneurship curriculum where students can earn a certificate displaying a holistic understanding of running a business. Furthermore, speakers frequently offer seminars to help students learn from their experiences and prominent case studies.

MBA programs in entrepreneurship require students to develop a holistic understanding of running a business. Moving beyond learning how to pitch investors a business idea or calculating the financial needs of projects, the best MBA programs in entrepreneurship today emphasize the vast scale of our global economy. Students will learn how management practices differ when working with small organizations, Web 2.0 techniques (including social media marketing and online copywriting), and international business techniques to capture opportunities on a global scale.

Sustainability MBA Programs

As the global population surpassed 7 billion in late 2011, MBA programs have begun emphasizing the sustainable management of social and environmental capital as a requirement for conducting business in a resource-scarce world. Often known as “Sustainability MBA programs” or found in partnerships with public policy/environmental studies programs, these socially conscious MBA programs look beyond financial returns on investment to what’s known as the “Triple Bottom Line”. In contrast to traditional businesses where maximizing shareholder value is what motivates business decisions, companies that adhere to the triple bottom line seek to benchmark themselves not only using financial metrics, but also in terms of social and environmental impact.

Acquired by JP Morgan Chase after bankruptcy, Washington Mutual today is part of one of the largest institutions in the world committed to sustainable ways of conducting business. Despite having a culture of investment banking through J.P. Morgan and commercial banking under Chase, the financial institution actively invests in causes ranging from renewable energy to microfinance. According to J.P. Morgan Chase’s corporate responsibility website, the company has invested or facilitated $6.7 billion of tax equity capital to renewable energy projects in the U.S. Furthermore, it is a founding sponsor of the Global Impact Investing Network and a member of the International Association of Microfinance Investors.

Sustainability MBA programs seek to expose their students to innovative metrics for calculating social and environmental ROI benchmarks seen as subordinate to profits before the crisis. For example, Babson College’s Olin School of Business is home to a fellows program that allows MBA candidates to apply their knowledge to nonprofit companies. According to a Businessweek article, this program has connected MBA students with organizations ranging from the New York’s American Composers Orchestra to the U.N. Foundation’s Girl Up Campaign. These nonprofits, which benchmark their financial stability against industry leaders in addition to seeking social returns on their investments, exemplify the skills leading sustainability MBA programs seek to develop in their graduates.

Behavioral Finance

One of the biggest myths debunked by the financial crisis was the efficient market hypothesis. This hypothesis asserted that financial markets (including the financial instruments responsible for the sub-prime crisis) were informationally efficient for all individuals. Essentially, prices of assets on the open market fully-reflected their inherent value. Unfortunately, the financial crisis displayed the inability of ratings agencies to fully display the risk involved in certain investments; static risk formulas are no longer the end-all-be-all of risk analysis and economists are becoming increasingly aware of irrational human biases that numbers can’t account for.

Barclays Group acquired a majority of Lehman Brothers’ assets upon bankruptcy. Introducing human psychology as one of the considerations when investing, Barclays is adopting principles in behavioral finance to better account for its investments. According to its investment philosophy, Barclays aims to help high-worth individuals balance their portfolios by investing less in personal and opportunistic holdings, which are driven by emotions or convictions. Instead, by investing more into a proven investment portfolio, these individuals will have better success with portfolios driven by discipline and rationality.

Savvy MBA programs today are instead incorporating behavioral finance into their curriculums. Pioneered by Daniel Kahneman, who wrote a paper in 1979 entitled, Prospect theory: An Analysis of Decision Under Risk, behavioral finance incorporates cognitive psychology, game theory, and other branches of economics, psychology, and sociology to better understand human behavior under constraints. Today Kahneman teaches behavioral economics at Princeton University, and despite being a faculty member for the school’s Woodrow Wilson School of Public and International Affairs, he continues to conduct breakthrough research helping MBA programs better understand their avenues of work.

MBA Programs Today

Today’s MBA programs are no longer in the business of churning out graduates with outdated business knowledge. On the contrary, business schools are hoping that by presenting their students with a holistic understanding of the world of business will bring back a human aspect to the field of study. As Thomas Friedman noted, globalization has indeed flattened the world. A revamped MBA curriculum will allow graduates to use their knowledge to democratize the benefits that businesses can bring to humanity.

MBA Programs: an Outdated Curriculum

In 2007, MBA graduates armed with their Black Scholes formulas, econometric theories, and mass marketing techniques entered a bustling job market with seemingly limitless career opportunities. They had no reason to look back; for decades MBA holders had held executive positions at some of the most successful Fortune 500 companies in the world: Richard Fuld (MBA from NYU) was the CEO of Lehmann Brothers, Kerry Killinger (MBA from the University of Iowa) led Washington Mutual, and G. Kennedy Thompson (MBA from Wake Forest) headed Wachovia’s operations.

The sub-prime mortgage crisis of 2007 took many by surprise and destroyed the investments of many. Not only did the crisis render obsolete the tools MBA programs taught to its students, it wiped out the value of inflated investments banks made, forcing many to bankruptcy. The lack of transparency and delineation of personal risk involved with making investments allowed the consequences of bank failures to spread globally. Because of the financial crisis, the public lost confidence in the value that MBA programs deliver. Furthermore, prominent financial institutions were no longer seen as beacons of opportunity; they were broken systems that needed reform to become relevant in the 21^st century.

The Aftermath of the Financial Crisis

The financial crisis had reeling effects on stock markets, financial institutions, and personal wealth. By 2009, the Dow Jones Industrial Average bottomed out at $6,000, less than half its 2007 value of $14,000. Successful businesses, including the aforementioned Lehmann Brothers, Washington Mutual, and Wachovia went bankrupt, resulting in thousands of lost jobs. Finally, the deflated housing bubble cost average homeowners substantial amounts of their life savings as home prices collapsed.

Global financial institutions, often headed by MBA graduates, took the brunt of the blame for causing the crisis. According to a paper entitled, “Job Outlook for the Class of 2010,” large organizations with over 4,000 employers who historically hired over a hundred MBA graduates every year instead hired fewer than 70. Furthermore in 2009, the average number of new-hires per company fell to 26 individuals, the lowest average of college hiring in several decades. With a waning demand for business school graduates, MBA programs around the world needed to reform their curriculums to cater to the post-crisis world of business.

Today MBA programs have little semblance to the one-dimensional curriculums taught prior to the financial crisis. Experienced professors and ambitious students steering away from the traditional business model of specialization have fueled the reemergence of the MBA. According to President of Philadelphia University Stephen Spinelli, “We used to think it was highly collaborative when marketing and finance were working together. Now we see that partnerships need to be much broader; three-dimensional collaboration needs to be taught.”

MBA Programs in Entrepreneurship

Entrepreneurship has emerged as one of the hottest topics for MBA programs in the midst of the financial crisis. With financial organizations and “too-big-to-fail” organizations blamed for their mismanagement of money and control over the global economy, business-savvy students are rediscovering the potential for small businesses to succeed and create jobs in this economy. According to the Financial Times, management of small and medium enterprises (SMEs) represents a wholly underrepresented area of study for business schools. Although SMEs may not offer MBA graduates flashy entry-level jobs that established companies do, startups are devoid of bureaucratic structures hindering exemplary employees from achievement

Wells Fargo acquired Wachovia after the bank’s ill-advised investments caused it to go bankrupt form the financial crisis. Since then, Wells Fargo has actively recognized the important role entrepreneurs play in today’s economy. Starting with a $150,000 investment in Wake Technical Community College, Wells Fargo will continue to invest in “the development and delivery of education, support, and resources for present and future small businesses and entrepreneurs in the Wake County area.” This partnership offers an entrepreneurship curriculum where students can earn a certificate displaying a holistic understanding of running a business. Furthermore, speakers frequently offer seminars to help students learn from their experiences and prominent case studies.

MBA programs in entrepreneurship require students to develop a holistic understanding of running a business. Moving beyond learning how to pitch investors a business idea or calculating the financial needs of projects, the best MBA programs in entrepreneurship today emphasize the vast scale of our global economy. Students will learn how management practices differ when working with small organizations, Web 2.0 techniques (including social media marketing and online copywriting), and international business techniques to capture opportunities on a global scale.

Sustainability MBA Programs

As the global population surpassed 7 billion in late 2011, MBA programs have begun emphasizing the sustainable management of social and environmental capital as a requirement for conducting business in a resource-scarce world. Often known as “Sustainability MBA programs” or found in partnerships with public policy/environmental studies programs, these socially conscious MBA programs look beyond financial returns on investment to what’s known as the “Triple Bottom Line”. In contrast to traditional businesses where maximizing shareholder value is what motivates business decisions, companies that adhere to the triple bottom line seek to benchmark themselves not only using financial metrics, but also in terms of social and environmental impact.

Acquired by JP Morgan Chase after bankruptcy, Washington Mutual today is part of one of the largest institutions in the world committed to sustainable ways of conducting business. Despite having a culture of investment banking through J.P. Morgan and commercial banking under Chase, the financial institution actively invests in causes ranging from renewable energy to microfinance. According to J.P. Morgan Chase’s corporate responsibility website, the company has invested or facilitated $6.7 billion of tax equity capital to renewable energy projects in the U.S. Furthermore, it is a founding sponsor of the Global Impact Investing Network and a member of the International Association of Microfinance Investors.

Sustainability MBA programs seek to expose their students to innovative metrics for calculating social and environmental ROI benchmarks seen as subordinate to profits before the crisis. For example, Babson College’s Olin School of Business is home to a fellows program that allows MBA candidates to apply their knowledge to nonprofit companies. According to a Businessweek article, this program has connected MBA students with organizations ranging from the New York’s American Composers Orchestra to the U.N. Foundation’s Girl Up Campaign. These nonprofits, which benchmark their financial stability against industry leaders in addition to seeking social returns on their investments, exemplify the skills leading sustainability MBA programs seek to develop in their graduates.

Behavioral Finance

One of the biggest myths debunked by the financial crisis was the efficient market hypothesis. This hypothesis asserted that financial markets (including the financial instruments responsible for the sub-prime crisis) were informationally efficient for all individuals. Essentially, prices of assets on the open market fully-reflected their inherent value. Unfortunately, the financial crisis displayed the inability of ratings agencies to fully display the risk involved in certain investments; static risk formulas are no longer the end-all-be-all of risk analysis and economists are becoming increasingly aware of irrational human biases that numbers can’t account for.

Barclays Group acquired a majority of Lehman Brothers’ assets upon bankruptcy. Introducing human psychology as one of the considerations when investing, Barclays is adopting principles in behavioral finance to better account for its investments. According to its investment philosophy, Barclays aims to help high-worth individuals balance their portfolios by investing less in personal and opportunistic holdings, which are driven by emotions or convictions. Instead, by investing more into a proven investment portfolio, these individuals will have better success with portfolios driven by discipline and rationality.

Savvy MBA programs today are instead incorporating behavioral finance into their curriculums. Pioneered by Daniel Kahneman, who wrote a paper in 1979 entitled, Prospect theory: An Analysis of Decision Under Risk, behavioral finance incorporates cognitive psychology, game theory, and other branches of economics, psychology, and sociology to better understand human behavior under constraints. Today Kahneman teaches behavioral economics at Princeton University, and despite being a faculty member for the school’s Woodrow Wilson School of Public and International Affairs, he continues to conduct breakthrough research helping MBA programs better understand their avenues of work.

MBA Programs Today

Today’s MBA programs are no longer in the business of churning out graduates with outdated business knowledge. On the contrary, business schools are hoping that by presenting their students with a holistic understanding of the world of business will bring back a human aspect to the field of study. As Thomas Friedman noted, globalization has indeed flattened the world. A revamped MBA curriculum will allow graduates to use their knowledge to democratize the benefits that businesses can bring to humanity.